Most analysts expected Argentina’s economy to slow down in the second quarter, owing to lower exports to Brazil and domestic demand. Yet, last Friday, numbers surprised on the upside: the national statistics agency, Indec, reported a 9.1 per cent growth in the period from a year earlier. It also says growth this year will be 8.3 per cent, roughly in line with the previous years.

Hard to believe? Yes. While Indec is widely known among Latin American specialists, it is mostly for its talents at twisting alarming statistics into acceptable figures. The agency predicts inflation will be close to 9 per cent for 2011, for example; the private sector says it will at least twice that. Observers know that Indec executives are mainly nominated by the government, so they take official data with a pinch of salt (Argentines too).

But that’s missing the point. There’s little doubt Argentina’s economy’s been growing fast, whatever the actual number: a surge in public spending has boosted domestic demand; generous subsidies in public transport and utilities have hedged consumers against rising energy prices; massive wage increases have helped Argentines wither inflation. And on the export front high commodity prices have brought in easy cash, whilst fast-growing Brazil, the country’s first trade partner, has been hungry as ever for cars made in Argentina.

A more thorny question is how long this will last. Not very long, say most observers. For one, because public money is running short. The government has already tapped heavily into its foreign reserves, and is still weary of returning to credit markets 9 years after defaulting on its debt. Inflation, still ramping up, would also dictate tighter monetary and fiscal policy. So president Kirchner Fernandez will have to tighten the taps some point after this October’s elections (which she is quasi sure to win), and a 30 per cent increase in public spending won’t happen again next year. Nor will a 25 per cent boost to the minimum wage. This will dry out part of the customer spending spree.

The second engine of growth, exports, is likely to cool down too. Brazil has cut its growth forecast to under 4 per cent next year, which will disproportionately affect Argentina’s trade balance. The Eurozone crisis, and US gloom, will put further strain on the main sources of foreign cash. A stronger Argentinian Peso won’t help.

Even more concerning is the lack of alternative, long-term source of growth. Foreign direct investment, in particular, won’t make up for the loss of momentum: at $6.2bn, it is already weak compared by Latin American standard (Brazil is at $48.5bn, Chile at $15.1bn, and Peru at $7.3bn). The reasons for this are easy to find. Kirchner has capped prices on utility rates, limited ownership of arable land, and intends to raise taxes on agricultural exports; these unorthodox policies scare off potential investors.Â But since they are a cornerstone of Kirchner populism, they are likely to endure.

Argentina is the land of Malbec, and the country has not had a bad harvest for a long time. You don’t get this every year without understanding the concept of sustainable growing. Economy is just the same - maybe it’s time the president spends some time pruning the vineyards.